How Long does it Take to Buy a House?CASAPLORERTrusted & Transparent
The process of buying a house can seem long and overwhelming, but it doesn’t have to be that way. With the right preparation and a good understanding of the steps involved in purchasing a house, you can make sure to avoid delays and make the process as seamless and fast as possible.
What You Should Know
- The process of buying a house can take an average of 5 - 6 months, however, this will differ depending on the specifics of each buyer’s situation
- If you want to speed up the process of buying a house, you can prepare beforehand by getting your finances in order
- A mortgage pre-approval will help determine how much house you can afford and will make your offer seem more serious
- A real estate agent can help you search for your dream home, negotiate with sellers and prepare the offer
The process of purchasing a house can take an average of 5 to 6 months. The exact time will depend on the specifics of your own situation as a buyer. Do you know what type of house you are looking to purchase? Are you interested in a specific neighborhood? Are you working with a real estate agent? The answers to these questions and more will determine the time it will take you to purchase your dream home.
Step 1: Get your Finances in Order
Time: ~ 1 week
Before you start looking for a house, make sure that you will be able to get a mortgage for it. This means that you have to arrange your finances and evaluate how much you can afford. You can take some preliminary steps to make sure that you will be approved for a mortgage, such as:
- Checking your credit report and making sure that there are no errors. Sometimes the credit bureaus make mistakes or do not remove the paid-off collections, which can negatively affect your credit score
- Paying off any outstanding debts. If you have a lot of outstanding debts, they will increase your Debt to Income Ratio, which negatively impacts your approval chances
- Saving money for a down payment so that you do not waste time when you actually do apply for a mortgage
- Organizing your paperwork. These can include your tax returns, pay stubs, bank statements, etc.
Step 2: Get a Mortgage Pre-Approval
Time: ~ 1 week
A mortgage pre-approval will allow you to know whether you will be approved for a mortgage and how much you will be able to borrow from a lender. This is a critical step in the home buying process as it will save you time when you start searching for a house by having an idea of how much you can afford. Moreover, by getting pre-approved for a mortgage, you can show the lender that you are a serious buyer. A mortgage pre-approval will also help in speeding up the process of getting approved for an actual mortgage, as the lender will already have most of your paperwork. It generally takes about a week to get pre-approved for a mortgage.
Step 3: Hire a Real Estate Agent
Time: ~ 1 week
Working with a real estate agent can speed up the process as they have knowledge about the area’s real estate market and can have access to house listings not easily found. A real estate agent can provide you with a variety of options according to your requirements and budget, rather than you doing the work yourself and searching every listing. If you do decide to hire a real estate agent, make sure that they are someone you can trust.
Step 4: Shop for a House
Time: ~ 3 Months
With the help of your real estate agent and a mortgage pre-approval on your hand, you can now start searching for houses. Since you now know what your budget is, avoid looking at properties that you cannot afford. Moreover, try to narrow down your search by deciding on a location and defining some criteria that your ideal home would have. This can help your real estate agent know what to look for.
Once you have identified a number of houses that you want to look at, make sure to do a thorough inspection when you visit them. Look for signs of plumbing, electrical issues, or any gases present such as radon or carbon monoxide. Discovering these issues before things proceed to the next stage will save you time.
Another thing you can do when searching for a home is to set up saved searches on different platforms that will notify you when house listings fulfilling your criteria become available. The whole process of shopping around for a house can last from a couple of days to a few months. It all depends on when you come across your dream home. However, it usually takes an average of 3 months.
Step 5: Make an Offer and Negotiate
Time: ~ 1 month
Once you are set on a house, your real estate agent can help you in creating an offer for the seller. The agent will include the price offered, any contingencies that need to be met, and other terms. Once the seller receives the offer, they can either accept it, reject it, or make a counteroffer on it. If the seller rejects your offer, you can either step away or make a more attractive offer.
It is a good idea to include your mortgage pre-approval with the offer letter so that the seller knows that you won’t have any trouble obtaining financing to purchase the house. Moreover, you can also put down earnest money to show the seller that you are a serious buyer.
The negotiations can go back and forth. While it may take a week or less for the seller to accept the contract, in other cases the negotiations and counteroffers make this process last approximately 1 month or even longer.
Step 6: Get an Official Mortgage Approval
Time: ~ 1 week
Once you and the seller have a deal, you can officially apply for a mortgage. Mortgage approval and pre-approval are different since, in order to be approved for a mortgage, certain requirements regarding the deal and the property will need to be fulfilled. These processes include a home appraisal, title check, and home inspection. The underwriting process itself and the collection of the documents can take approximately one week. It can take less or more depending on whether you already have a mortgage pre-approval.
Step 7: Get a Home Appraisal
Time: ~1 week
A home appraisal is required by the lender to ensure that the price of the property and the mortgage does not exceed the value of the home. If the price is higher, then you may need to put more money down to cover the difference between the two. The appraisal needs to be conducted by a third party and the report of the home appraisal is sent directly to the seller.
Step 8: Get a Home Inspection
Time: ~ 1 week
A home inspection is needed to see if there are any repairs that need to be made around the house that you may not have noticed on your own. Upon the results of the home inspection, you can either choose to proceed with the deal, back off or renegotiate the terms of the offer. A home inspection can take up to 1 week. This includes the time to schedule the inspection, conduct it and wait for the findings.
Step 9: Search Title and get Title Insurance
Time: ~ 2 weeks
A title search is needed to ensure that there are no other owners or claims on the home’s title. The lender will need the title search and the lender’s title insurance to approve the mortgage. A title search can take around two weeks to be conducted.
The lender’s title insurance is used to ensure that the lender’s claim on the house has priority over other claims in the case that the buyer forecloses on the home. The lender’s title insurance is also used to cover the mortgage amount in the scenario that the buyer somehow loses ownership of the house.
Step 10: Close on the Loan
Time: ~ 1 week
Once all the documentation has been collected, and the home appraisal and title search have come back clear, you are ready to close on your loan. The lender will provide you a Closing Disclosure containing all the terms of your loan agreement, which can include the down payment amount, the mortgage rate, and the closing costs. You have 3 days to read the Closing Disclosure agreement and acknowledge it. After that period, your lender will schedule a meeting for you to sign all the documents, at which point you will close on your loan.